Skip to main content

tv   Bloomberg Bottom Line  Bloomberg  May 27, 2014 2:00pm-3:01pm EDT

2:00 pm
>> from bloomberg world headquarters in new york, i am alix steel in for mark crumpton. this is "bottom line." today, the pain president strap -- the ukraine resident cracks down. a new kind of heroine. we will look at action years meant to empower little girls. to our viewers here in the united they than those of you joining us around the world, welcome and happy tuesday. full coverage of stocks and stories making headlines today.
2:01 pm
yang yang with details on china's move on as a notch, trying to present country, and addiction to russian energy area we begin today with ryan in the fledgling days of the ukraine new president. good evening, ryan. ukraine resident length as not have much time to celebrate the voters choice ukrainian -- ukrainian troops, not just the wayne graham troops, a helicopter gunships as well, as they said back then there were, fighting heavily with rebels. they killed 30 rebels so are. it has not then without him than your and server body here in europe follows on the dense as they lost contact with a team of
2:02 pm
logical of their view will also in the east of the ukraine. all of this is coming just after russia warned ukraine and not to initiate military out rations, saying that would be a loss mistake. the ukraine president elect pushing to clear that area of rebels. >> the follow-up question is, how is russia reacting to the crackdown on those rebels? >> the russians have reiterated their demand that the youth lenience cease their operations in the east of the country. in the last 24 hours, we have seen several pro-russian fighters move into the east of the country. many of the men describing themselves as volunteers. the ukraine accused the russian government of funding and
2:03 pm
allowing these to come into the ukraine. they are studying the situation and are definitely not pleased and warned the ukraine not to go forward with this. we will have to keep an eye on that very carefully. >> thank you. let's look at u.s. reaction to the victory. bloomberg news foreign policy reporter joins us now in washington. .ell us more how will they deal with him? off to norself-made who grew up under soviet ukraine and eventually made his $1 billion in chocolate. he is known as the chocolate kang and sold cocoa beans in the 1990's and eventually validated the biggest empire in the country. he held positions in
2:04 pm
the pro-russian government and his victory was hailed by the u.s. and the eu and is seen as one russia can do business with. base head they're ready to dialogue with them but warned him against continued crackdowns in southeastern you rain. he defied that initially by continuing efforts to use top separatist's from these stabilizing. russia.liary on rom how does rush of reference i'll that? -- reconcile that? pull back it would its troops from the ukrainian border before to allow or a few ball action. for the first time, the pentagon is can arming some troops were pulled back. a clear reaction to the threat on the u.s. and eu are further sanctions. russia at this point is weighing
2:05 pm
its options and seeing what he will do. it does not want the west to act as a mediator between them. they are still trying to the the ukraine these they've lies herein certainly, the reaction so far has been milder than europe and the u.s. worried about it being. >> over 50% of the vote taking the sanction congress nation in the eu and the u.s. office able? vice it does immediately. eu leaders are meeting in bross's forays, and we already heard the swedish prime ministers they he does not ask them to discuss new sanctions today but at the same time, the polish prime minister said we need to keep that threat on the table and it is important moon doesat if anything further to disrupt sanctions, we will be right there. the screenreal mbo
2:06 pm
russia and the eu and trade, particularly on the energy on. the eu depends on russia for 30% of natural gas needs and half of that amount goes through ukrainian pipelines are there is worry among your team leaders that if we take measures against russia am a they would tally it against us i cutting off energy and this was a real uncertain. one way to hit russia and their bottom line, this country is heading toward recession already, is by hitting them on energy, the vast majority of exports. that has not happened of our you and i think we will see it happen. >> need a surface, russia needs the eu just as much as the unique. russia signed a deal with china but only for 38 billion you but the. we are looking at 150 billion he received very >> you are right. not to mention china actually
2:07 pm
signed the deal, they a lower price than the europeans are paying now. vladimir putin was careful to say in vain it is per glass week that this does not mean they do not want eu as an energy partner but adding on. it is a symbiotic relationship and keep in mind, food and grab crimea, which is energy rich in it elf, and he has nationalized some of the energy companies in crimea and there are economic for that as well. what we will have to see going forward is how does rush arose bond in the coming weeks and will there be any rollback in this position of an and ukraine because i do not in the eu are ready to ask that tim, having taken over the crimean peninsula. that is one thing they want to honest but in the immediate future, i do not the furthest ancient coming to as the election was out with in a calm
2:08 pm
way and who may have gotten what he wanted, keeping ukraine on table and outside of the eu and nato aussies orbit. five the work is just beginning at this point. thank you. you can join us or his day as least to live with the ukraine ambassador to the united days errs day at 2:00 right here on "bottom line." president obama will talk about troop levels in afghanistan their mr. of, lance to keep 9800 u.s. troops in at -- then are the group formerly and. we will have live coverage when it is. you can also watch it on our live event channel. mobile ishe they investor conference is underway today in new york. stephanie ruhle is there and
2:09 pm
joined now by the managing director and make an list at deutsche bank. hello. five thanks. the mothership for at the end of 2014, your call would be cautious on bank because of said paper. what do you say now? >> i still get was the right call. big tank stocks have under want and it is in line with earnings. stocks look cheaper on absolute aces, but it to earnings, big angst have not really gotten that much cheaper. >> is the reason to be cautious because of taper or regulations question mark people are feeling so concerned that the airmen of justice has a vendetta for the industry. class a lot of the games last year with bond buying purchase around, and you limit your multiple expansion opportunity. from a fundamental and you, the
2:10 pm
government being in on by program, it is what yours in and so far this and so far thie have further confirmation today from dave morgan and citigroup that trading is coming and we ago and thatos will continue to be a common -- van years ago. -- van years ago years ago. the key driver will be growth in terms of drive and revenue. weaver are the regional bank, where there is more leverage. as ago you and about long growt, over half of revenues have the regional bank. revenue regulation and the issues use the out there. >> can a suntrust of word the increased cost associated with regulations and compliance?
2:11 pm
for jpmorgan to hire, they could do it in a blink of an eye. excellent use the is the cost of regulation increase his and how comp lex and they gave inc. is. on capital roles, the bigger you are among the more capital you need. there may be some upfront advance, but there's also a need to them the the business better and more aggressively because of the lower cap over time and. five when you see the guilty lee at credit suisse and see what they're going through, does it give you pause in terms of a national investing when it seems that the government is coming out of them heart? less in terms of a read through, it is something we are focused on. the aggressiveness coming on a revenue -- regulatory front. we all know and based all the ninth inning can take time to layout. sometimes there are extra innings. capital in the industry is daily
2:12 pm
higher than it was years ago. liquidity is a high nerd i am oh that at some oink, the regulatory environment will use a little margin and we can hope is more on fundamentals. >> so it does not give you concerns that new deals that are coming, investors are searching for yield, that does not you can turn that we're getting risk year and risk here? let's there are very small talk it's worries you risk taken by the bank but 95% of the business we're doing our much less risky than years ago. you can look at credit card underwriting standards and lending out there. inventory of investment banks. five have banks lost their highflying businesses? some of the most down to evil in bank continue to migrate to ivan equity firms and hedge funds. if
2:13 pm
those superstars are not in theirs eats, where will they it's delivered? they have great minds and if those great minds are not in the seats, where is it coming from? >> a lot of people still need credit to buy a tv. i am hopeful we will he revenues pick up as the economy picks up. and then they have more money, hopefully, to play -- hey there and lloyd ease. we have got a new chart in our week ricci sheet and it shows the elite of interest-rate and foreign exchange. we are those to an all-time low of ready five years. -- dirty five years. -- 35 years. more client business and more revenue with the invest in bank and money for the banks. >> the banks really have the cutity to continue to
2:14 pm
headcount? they started cutting into thousand eight. at this way, we are on the 26th round of layoffs. >> banks have done a good job of controlling the cost they can control. the litigation is tough to control and client cost is are tough to control. is a multiyear ross as in terms of improving the, getting smarter and better technology. moderate the clients but over a longer time. best thank you for joining us. alex hill, i will send it back to you. the party is not over. >> coming up next, china make moves in that is beautiful over five burress the notch and we will tell you what it is when we return. ♪
2:15 pm
2:16 pm
2:17 pm
2:18 pm
>> this seems like the chinese italian over u.s. biplanes. and that is exactly right. eight. relation on the part of the chinese days after the u.s. justice are -- department indicted military is more or less the hat and computers of u.s. companies and stealing secret. the new story, courting to evil play with the matter of the chinese government is reviewing whether the use of ibm's service compromises defensive end. he and chinese agencies are pushing banks to remove the ibm servers and replace them with local land vehicle is that's -- below to big low ibm. below -- a below -- a
2:19 pm
big blow to ibm. it is not aware of any government house the wreck many against servers and that ibm is a trust the partner in china and has been from war than her years. class of is ike ibm got about $23 billion in revenue last year. if ibm loses business them what chinese upton is will benefit us and mark >> the analysts believe china will use just about any solution to -- domestic rants who's servers are already in use by the savings bank company, is seen as a potential winner. this game five when five percent on the news in hong kong.
2:20 pm
estimates of purchases in china i'verise about 11% to 100 billion dollars. companies might not get full participation. five i have a going this is not over yet. while them are rats have a you are own nominations for grabs, they're paying was attention a turn art of a strategy to purple urine blue and red make purple, is that the deal? west that is the deal. basically, we're looking purplee and red make purple, is that the at a national narrative that were up ofinst -- there are a series far right candidates who are in
2:21 pm
a position to win and for them that's it is an in office and the. a hard-line dance on immigration policy there is that is something both parties point to as potentially double matting. percentage of the ovulation is his and again that is growing. mainly battleground tech. an organization stocked with obama camp ane veterans to seize on campaign demographics and eventually for them -- for presidential elections. democrats are we really laying the long game. now -- ntact they play twice even so, they need a candidate to rally behind. who are the races of that
2:22 pm
strategy? five they have rally. senator of center -- a bill that made it more depth to get illegal abortions. as the arty's candidate, she has driven infrastructure for her race but she is down. even the most missed the and the arty would say it will be years for these really take hold. keep an eye on the castro brothers. weeko was nominated last and has a sick the made his way to every single short list and also his twin brother is a member of congress and they are young and his panic and well loved into the arty. these two names need to be watched going toward very best thank you very we will watch the color herbal area we will get an
2:23 pm
update when we return. they with us. -- stay with us. ♪
2:24 pm
2:25 pm
2:26 pm
>> bloomberg tv is on the market. let's look at where stocks are trading. a record or the us and the hundred. it rises half of one is then. movers, of individual becomemers giant -- to the largest drugmaker, it all comes to an end are now. another offer and talk to the revived in three months. we're looking at shares of inter-on peninsula hotels.
2:27 pm
the company's burned a takeover bid and evaluated at $10 billion. the owner of the holiday inn declined to comment. we will be back with more globe bottom line" is next. ♪
2:28 pm
2:29 pm
2:30 pm
>> welcome back. i am out with steel. the ukraine newly elected -- ident must find there is another this view that fires a swift resolution concerning energy supply. european leaders this week announced a new but tentative deal between the ukraine and russia. has theover gas races roots and serious concert once is. class the ukraine presidential election may help solve one problem here -- who is in
2:31 pm
charge. a new president will face several serious challenges, including a gas -- this is with russia. recently, they took over the ukraine gas company. they get almost all the gas from .he russia gas company ukraine leaders say it is on these mobile. constructive.t off anhe politics -- the aging policies. they are all consequences of a shared past. fighting maybe taking lace hundreds of miles to the east. economickraine, and
2:32 pm
and lyrical this dude is raging. it's the us on five lines like .hese voters in on the euro and they are used to massively with industrial energy. it pays the lands for those the mess gas needs. that is where much higher in will hurt national gas. >> most of the bills are in the united days dollars while residential uses pay. current the has fallen against the dollar. when gas demand -- it gets squeezed. saysa's prime minister that is not russia's problem. less any creditor is entitled to get their debts repaid. we expect to receive the
2:33 pm
repayments accumulated over time. questec currently stands at three point i've billion u.s. dollars and may rise another $1.6 billion next week. >> sometimes it is a very efficient leverage. >> ultimately, the real issue is simple -- right now, rush is the only game in town and the leadership will have no choice but to deal with .nd five rom -- by from class will this be russian or the you and gas is marked by ukraine's are aiming their rent late so it is not surprising
2:34 pm
russia wants paid. that it's very and mutual in the gas market your russia also it saying we want you to a higher death rate is ended going up because it is no longer a reduction thanks to a base in crimea. it is very complicated in terms decidingriting -- of who has the upper hand. right.ll thank you very much. great room wording in the ukraine very or more on the you election this weekend, we want to turn to in your lyrical science is who specializes in europe and 30 during the joint me now is firm in arlington in, virginia. welcome. class thank you. glad to be here. i with the elections in the ukraine, we have an election with over to the percent of the vote. what kind of mandate it is? >> a
2:35 pm
good one. it is not a prize he was elected, but the that there was a decent turnout of ross the country and in the region shows there was a lot of interest among the populace in moving toward an out of the current races. it is something he will be able to use both in dealing with secretary in the east, and the with his the ghost the ancient in moscow. lex let his thin line taking a firm's dan in the ease, but with vision death man russia? less you are right. the phillies that he can is separatist to be terrorist. he is using air our again them, themnificant step against to say the government will not
2:36 pm
tolerate any further is with any of these parties. we have to extend a hand to moscow, who may either difficult or harder to negotiate with him when he is taking tough action. how that will turn out remains to be seen. less you have vladimir putin coming out saying he still recognized as yet ninkovich coming out. how does russia deal with balancing act? >> it is true they are feeling a little bit. they made it clear they are willing to negotiate with the new government. it is a positive sign. i inc. they would hope the situation, certainly, would calm down here and also, there was fear of the situation would deteriorate any further, the that have been into a military action that could have run about even more sickness and fashions
2:37 pm
rom the midwest. class at the end of the day, what kind of control does russia have over the separatist in east? -- in the clear these separatist tap-in and urged and have created a frankenstein there that it is not certain they be one ofry that will the big things, whether or not tacitlyby, or at least his will to do press what about word in ukraine without touching russia to our? lex it is a big challenge or the year in unity and the united dates right now, to try to take advantage of the moment towards
2:38 pm
civilization we have seen develop. to do it in a way that does not legitimize actions are the taking in crimea, it will be a really is the old fine line to walk. qwest is any of this matter? i was struck by the headline that ep is working oser. does any of this matter or business is? >> absolutely. from a business respective, if the situation in the you rain were to the venue to deteriorate any word seeing the russian border, yous thefrom a
2:39 pm
would see serious implications because of sanctions and repercussions for global financial markets. hope lake, we have diverted that. let's hope we. we appreciate you joining us. as a reminder, president obama will make a statement at the rose garden at 2:45 p.m. and is expected to keep hundreds of troops in afghanistan. later this year. we will have live coverage. coming up, the latin america report with the law taking. a look at where the best teams will be playing next month at the world, and -- world cup in brazil. ♪
2:40 pm
2:41 pm
2:42 pm
qwest time for k's latin america report. facing off. here is a look at what those teams will be playing on. -- nottnership
2:43 pm
artificial turf, but a commendation of grass and that. ♪ ♪
2:44 pm
♪ ♪ >> i am pretty tight and i cannot eight or the world cup. that is your work for this tuesday. coming up, bucking very it types and creating action is were girls. we will talk about a mission to help young girls envision themselves as strong and our. -- powerful. ♪
2:45 pm
2:46 pm
>> president obama is about to make his a man. qwest on behalf of a great old
2:47 pm
nation, or the extraordinary five as they make on behalf of of security there are no is also able to meet with our dinner to assess the project -- progress we have made. i want to date the american evil on how these here, we will bring america's's longest word to ayers on will and. the united dates -- responsible end. we went to afghanistan out of ms. s vf or our nation was attacked in 2001. we went to war against al qaeda at the response of american evil and the representatives of congress or the international community and our nato allies, and with gas afghanple. -- of the people.
2:48 pm
we have now been in afghanistan longer than many americans that the. make numbers take. thanks to the skill and sack as our troops, diplomats and intelligence specials, we have struck cigna and blows against al qaeda's leadership, we have eliminated bin laden, and lost tax against our home -- we also supported the afghan people as they can you the hard work of building a he. we have extended more opportunities to their feet, including women and girls, and we held train and equip their forces. we are auditioning the job we started. in the last several years and we were to transition responsibility to the f is your it a year ago, afghan forces assumed the lead for combat
2:49 pm
operations. they have figured to grow in size and length while make you sacrifices were there entry. the transition has allowed us to steadily draw down our own worse is from a week of 100,000 u.s. troops to roughly word 2000 today. -- roughly 32,002 date. 32,000 two date. -- 32,000 to date. during the spring, afghan has ,urned out in the millions defined threats in order to determine their own best any. in just over two weeks, they will vote with their next president. afghanistan will see its first democratic transfer of power in
2:50 pm
history. in the context of this progress and having consulted with congress and my nationals 30 a.m., i determined the nature of the commitment america is compared to make. our of jenkins are clear. disrupting red post about -- why al qaeda supporting afghan security buses, and giving the f and evil the ability to succeed and dan on their own. here is how we will pursue those of you this. america's combat mission will be over by the end of this year. 30 next year, asked dance will be fully responsible or securing their country. american personnel will be in an advisory role. we will no longer patrol in towns, mountains, or valleys.
2:51 pm
that is a test for the f and people. second, i have made it clear that we are open to cooperating with afghans on two now missions at 2000 or team. training afghan worse is -- forces. i want to be clear about how the united dates is prepared to advance those missions. in the beginning of 2015, we will have approximately 98,000 u.s. let me start that over. i want to make sure we do not get is wrong. at the beginning of 2000 and 13, we will have approximately 9800 u.s. service members in different hearts of the country. 13, we willf 2000
2:52 pm
have produced that presence i roughly half and will have consolidated our two. a year later, by the end of two draw --r military will draw down to him normal millet justresent and this is a in iraq. even as our home, the international unity will continue to his word afghans as they build their country to come, that our relationship will not be just i'm i were. it will be shaped by financial and development assist is as well as financials were. our commitment in afghanistan was rooted to the to teach it tarnish a in 2012. this has remained system with discussions you have had with our nato allies. just as they have in with us
2:53 pm
every step of the way in a and and, we let them to be with us every step of the way going towards. we will only sustain the military is after 2000 or government f and signs a bilateral security agreement our to the government have already negotiated. this agreement is essential to give our the authority to fulfill their mission while is that -- respecting afghan sovereignty. the final afghan candidates in an election president each indicated they would sign this agreement rapidly after taking office. i am hopeful we can get this done. the bottom line is it is time to turn the page on more than a decade in which so much of our form of suicidal is on words in iraq.
2:54 pm
when i took office, we had nearly $180 and true in harms way or by the end of this year, we will have less than 10,000. in addition to bringing our own, the new cap your in american one policy will allow us to redirect those saved while ending wars is threat ofchanging terrorism, while addressing it water set up rarities around the growth -- around the globe. americans have learned it is hard to end wars fan to begin them. this is how wars and in the 20 century. not rude signings era moneys, but proved blows to our adversaries, transitions to elective government thomas. he forces who are trained to take the lead and all really have is on civility. -- have responsibilities. we remain committed to secure and stable unified afghanistan.
2:55 pm
we will continue to support afghan led efforts to promote peace in the country through reconciliation. we have to recognize that as and will not the a perfect lace and it is not america thought responsibility to make it one. the user of afghanistan must be decided by afghans. do, and united days can what we will do, is secure our interests and help give afghans a chance, an opportunity, to seek a long overdue and hard-earned he's. e. peac we will never waver in our determination to deny al qaeda the same they had in 9/11. that is embodied by men and women in and out of serve today and in the past.
2:56 pm
in their eyes, i see the character that's his name's americans dirty and our leadership abroad. these are most young people who did not to volunteer in a time of war. as many of them transition to civilian life, we will keep a promise we made to them and all veterans and make sure they get the care and benefits they earned and deserve. this is part of an unbroken line in the heroes who give up comfort and the familiar to serve half a world away, and to give people they never thought they meet a chance to live a better life. sacrificextraordinary for them and their families. we should not be surprised they are willing to make it very that is who we are as americans. that is what we do. tomorrow, i will travel to west
2:57 pm
as he tom erica's newest last of the military officers to the dust how at can into our broader strategy going towards here and i'm confident if we carry out was roach, we can not only audibly and our warrior and his aunt, and achieve the objectives that's a us to war in the earth place -- that took us to war in can restoreace, we leadership around the world. thank you very much. [indiscernible] >> that was president obama making a statement in the rose darden on troop levels in afghanistan. let's get to the old mattingly am a white house first i didn't. he's answered by the white house area president obama just returned him a surprise to and. what part did that lay in his decision-making? >> the briefing he received in the region during that brief time he was there played a role and solidified he was
2:58 pm
comfortable with those troop levels. 32,000 in country right now. 9800 byreduce that to the start of 2015. what you heard here today is part of a string started with a visit to and is in this weekend and living with a speech at west point's's graduation tomorrow. the administration is really trying to round out their or and policy. afghanistan, a were going on in 10 years, the president made a lear this was a war he wanted to do. when he took office. officials have their way, then there will be no combat ready troops in afghanistan by the time he leaves office. staff. purely be >> what about the address tomorrow at west point? what do you think we will see? afghanistan is fully other troops from afghanistan, sitting in a broader stance administration wants to have over their i'll does your. they want the ability to be
2:59 pm
nimble and get involved in certain situations when they do it is in the best interest of the u.s. country building type of policy is one the administration is strongly trying to move away from it what you will see tomorrow is a president trying to outline, in detail, how he views his left two years in office will look from a it was at the very class all right. outside the white house, giving us inside reaction. thank you so much for watching this edition of "bottom line. ♪ .
3:00 pm
>> ok, we've got the s&p climbing to another all-time high. reports of a rebound in manufacturing, consumer home prices on the rise, but will investors remained optimistic? we will talk about it. i'm trish regan, and "street smart" starts right now. ♪ to the most important hour of the session. we have 59 minutes to go until the closing bell. coming up today, pimco recruiting. the former money manager is returning to fill